Assignment Topic: Question: In the case of Citec Inter Estates Ltd V Edimicosa Inter Inc. & Associates unreported SC 163/2006 decided on 9th June, 2017, the apex court finally settled on the meaning of section 60 of CAMA. So answer the following questions:

INTRODUCTION

Edicomisa International Inc. & Associates, registered under the laws of the United States of America as a corporate entity, was engaged by the Appellant as its “Architects and Engineers-Consultants and Sole-Contractor to do for the Appellant and the Federal Government of Nigeria, the conceptualisation, design, infrastructure and construction of Five Thousand Housing Units at Nbora District in Abuja”.

Part of the business was for the commitment of the Respondent to build two factories for the production of Simplex Cepol Wall and Slab Panels, as well as other elements to be used in the construction of the Housing Units for the Appellant. The Respondent bought all the machinery, equipment and vehicles for the building and operation of the said factories which it had built and immediately commenced the production of the Simplex Cepol Panels for the model houses, in furtherance of the agreement. Although the Respondent was paid for the supply of two new factories at the Nbora site, the Appellant terminated the contracts on the ground that the Respondent had installed second hand and fairly used equipment in the factories, while the factories constructed were unserviceable and unfit for purpose. Upon the termination of the contracts, the Respondent filed an action against the Appellant at the High Court of the Federal Capital Territory, Abuja to enforce its rights.

THE REAL IMPORTANCE OF THIS JUDGMENT

Though section 60 of CAMA was enacted to enhance international trade/commerce; hence, it permits the enforcement by a foreign company, a legal right accruing to it from a lawful business or transaction. The Section does not vest in a foreign company, a legal right to enforce an illegal contract. The situation envisaged by the Legislature when enacting Section 60 is where, for instance, a foreign company has had a transaction with a Nigerian or a Nigerian entity, which transaction could be enforced in Nigeria, but which of course may not have been as a result of any business the foreign company is carrying on in Nigeria.  In this wise, the real importance of this judgment is to discouraged illegal business activities in Nigeria by foreign companies.  A lot of foreign companies are not registered in Nigeria and are carrying out businesses. Some of them evade tax. 

TO WHAT EXTENT CAN  THIS JUDGMENT  PROMOTE INTERNATIONAL TRADE AND  BEST CORPORATE PRACTICES IN NIGERIA

Where a foreign company not registered in Nigeria purports to carry on business in Nigeria in contravention of the provisions of Section 54(1) of CAMA, such transaction is void, illegal and criminal. That is the legislative intent of Sections 54(2) and 55 of CAMA. The interpretational responsibility of the courts, is to construe statutory provisions to bring out and promote its purpose. The law is that the Court of justice, should not aid a man who grounds his cause on illegality.

To a large extent, this judgment will promote international trade and best corporate practices in the following ways;

1.      It will enable foreign companies to registered with corporate affair commission before the can carry out any business

2.      It will encourage legal business as a registered company with board of directors won’t want to engage in illegal business activities

3.      The foreign organization will have sense of belonging and will be confidence to do business in all ramifications

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